A large number of American students graduate from high school without knowing the basics of managing their money wisely. Their first step is often to take on a student loan to pay for college without understanding the scope of that debt. Whether your graduate plans to attend college, enter the working world, travel or join the military, all young people should know these basic personal finance rules.
Track your spending – Too often, people will spend mindlessly as long as there is money in their account. However, these are usually the people that can’t pay their bills at the end of the month. Keeping track of where you spend your money allows you to understand where you money has gone and where you can cut back.
Create a budget – Once you know where your money is going, creating a budget will help you designate where you want it to go. If you make a reasonable budget and stick to it, you won’t have to worry about not having enough money at the end of the month.
Earn compound interest – When you start to save or invest money, it earns interest. That interest can earn interest as well over time. This is why it is a good idea to start saving as soon as you can. Even if you can only save $5 or $10 a week, that money will add up over time.
Use cash – Research has shown that we are more careful with our money when we are handing over card than when we swipe a credit or debit card. If you do choose to use credit, never spend more on that card than what you can pay off at the end of the month. That will get you into even more problems with debt in the future.
If your child just graduated from high school, teach them what you can about what it means to manage money wisely. For help starting up a checking account, savings account, Online Banking or another financial tool, talk to Alpine Bank.